In highly leveraged partnerships, bottom-dollar payment obligations have been used by partners to increase their at-risk basis in a partnership to use loss allocations or to receive nontaxable cash distributions.
This item discusses final regulations providing guidance on when partnership liabilities are recognized as recourse under Sec. 752.
An entity that is recognized for federal tax purposes as an entity separate from its owners can be classified as one of several entity types, but the available classification options depend greatly on state law and the number of owners or members.
Federal tax reform has caused additional states to consider passthrough-entity-level taxes.
A recent Tax Court case provides a road map for establishing the legal requirements needed to sustain a deduction for worthlessness, and reinforces the position that actual abandonment of a partnership interest is not required to claim a loss under Sec. 165(a).
To allow those partnerships to take advantage of the beneficial tax provisions in the Coronavirus Aid, Relief, and Economic Security Act, the IRS is allowing partnerships to file amended returns for 2018 or 2019.
This item discusses the authority to consider when determining whether the general partner of an investment fund is engaged in a Sec. 162 trade or business.
A limited liability company can elect to be classified as a corporation and elect S status by following the procedures discussed here.
The enactment of the Sec. 199A QBI deduction adds a new consideration to the form of entity analysis because the QBI deduction available to a business owner may vary depending on a business’s entity form. This article discusses the differences in calculating the QBI deduction for S corporations and LLCs in a variety of scenarios.
The IRS published two memoranda that clarify how it will implement the BBA procedures, including appeal rights.
To promote nationwide consistency, the AICPA encourages states’ adoption of the MTC model statute that conforms to the new federal partnership audit regime.
This article discusses developments in the taxation of partnerships and partners, debt and income allocations, distributions, and basis adjustments.
This item discusses the tax basis and partnership capital accounting impacts of partner-incurred syndication costs.
Buy/sell agreements allow LLC members to control the transfer of ownership upon the occurrence of certain triggering events, but they must be carefully structured.
The IRS recently released new draft forms for partnerships under the centralized partnership audit regime enacted by the Bipartisan Budget Act.
The IRS is postponing the requirement to report partners’ shares of partnership capital on the tax-basis method for 2019 (for partnership tax years beginning in calendar 2019) until 2020 (for partnership tax years that begin on or after Jan. 1, 2020).
Partnerships making guaranteed payments may want to consider restructuring them as priority profit allocations.
A taxpayer, who received interests in four partnerships from his father by gift or bequest, did not step into his father’s shoes with respect to interest on certain partnership loans,
The IRS agreed with the team’s position that the amounts received for the memberships do not constitute income because the team is obligated to repay the money to the “members.”
Consider the scenarios that could cause a partnership to terminate so appropriate steps can be taken to properly account for the business’s status change.